Microsoft Corporation (MSFT) Needs A Break-Up: Jim Cramer

Microsoft Corporation (NASDAQ:MSFT) should be broken up and needs a man like Alan Mulally of Ford Motor Company (NYSE:F) to fix it, according to CNBC’s Jim Cramer (via Business Insider). However, he did dismiss the rumor that Mulally would leave Ford and go to Microsoft.

Why Microsoft needs a Mulally

Cramer believes that Mulally’s work at Ford Motor Company (NYSE:F) isn’t completed yet. He thinks Mulally wants to get up to between $3 and $4 earnings power for Ford before he will consider his work there complete. However, Cramer also said that Mulally would be good for Microsoft. He notes that Mulally “worked miracles” at The Boeing Company (NYSE:BA) before going to Ford and believes that he would be able to work miracles at Microsoft Corporation (NASDAQ:MSFT) as well.

According to Cramer, Mullaly would approach the CEO job at Microsoft by finding the right people—those who are “charged up” and ready to give the company’s business a boost. He says the right people would also avoid making problematic and expensive acquisitions like what Microsoft has been doing.

Will Microsoft be broken up?

Cramer believes that Microsoft Corporation (NASDAQ:MSFT) will eventually be split into three pieces. He says the company is “too big, too unwieldy and it’s not getting anywhere.” He also said that it has to do “something wild,” perhaps by spinning off the Xbox business or even by turning Nokia back into company that just does mobile phones and then selling it to buy another company like Sprint Nextel Corporation (NYSE:S). “You could go buy Netflix with Xbox,” Cramer said. He added that Microsoft could then run its Windows business similar to a utility company through reliable cash flows.

The three major businesses Cramer believes Microsoft Corporation (NASDAQ:MSFT) should split into include its Windows business, entertainment (which includes the Xbox) and the “other” category, which would have Nokia’s devices division as its cornerstone.